The Tariff Of Abominations---And A Short History Of US Trade Policy

By David Stockman. Posted On Friday, March 2nd, 2018

The United States was born a resource-rich exporting colony of the United Kingdom, generating federal revenues and protecting infant industries through tariffs on imports in the decades following its founding. Although tariff rates had fallen by the onset of the Civil War, the Union’s need to fund the war effort and the removal of opposition from Southern states in Congress began a period of relatively high tariffs that lasted until shortly before World War I, when they were lowered in conjunction with the introduction of a federal income tax.

Tariffs were once again raised in the 1920s, but a key inflection point was the Tariff Act of 1930, also known as the Smoot-Hawley Tariff. Smoot-Hawley represents a high-water mark for tariffs, after which the U.S. took a leading role on the world stage in reducing tariffs globally and creating a legal framework for resolving trade disputes via the General Agreement on Tariffs and Trade (GATT) and World Trade Organization (WTO).

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